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Executive salaries have been making headlines lately, starting with ocean shipping executives disclosing compensation packages from 2022. Spoiler alert: The winner was Gary Vogel from Eagle Bulk, who had total compensation of $7.004 million — 73% of it from company stock and 27% in cash. For context, that’s about $25,000 a week in take-home pay from Vogel’s base salary alone before stock options and additional incentives.
On the other side of things, this week we saw Knight-Swift executives take a 20% cut to their base salaries. Their stock options and incentive bonuses will not be affected. This decision comes after the carrier missed Q2 expectations and had to cut earnings-per-share guidance by 36%. CEO David Jackson and CFO Adam Miller have base salaries of $925,000 and $825,000, respectively. Combined, their salary cuts can add about $350,000 back to the company.
Coming down closer to the level of average people who don’t earn someone’s yearly salary in a month, the average salary for a director of supply chain in the U.S. is $110,000-$208,200 — obviously with a big emphasis on location and years of experience. Let’s go in the middle and say the average director of supply chain earns $150,000 a year. That is going to be the decision maker for all new business opportunities.
If you’re a broker or a sales executive trying to schedule a meeting with a director of supply chain or those who work under the director, you have to know the cost of their time. Someone who earns $150,000, probably takes home about $100,000 after taxes and other withholdings. It’s an estimate; roll with it. That $100,000 averages out to about $48 an hour.
The importance of being prepared, knowing your customer and doing research cannot be overstated. As much as we all would like to have a check of $25,000 a week, in this environment it never hurts to put a dollar amount behind the opportunity you’re after.
(SONAR Tickers: OTRI.FL, OTRI.USA)
Market Check. Florida has its first major hurricane of the year. Hurricane Idalia is expected to make landfall in the early hours of Wednesday. SeaPort Manatee and Port of Tampa Bay are closed to all inbound vessel traffic as a precautionary measure, with the Port of Jacksonville expected to close by the end of Tuesday. Rail companies are monitoring the storm closely as the path of the storm could change before it makes landfall.
As companies prepare to move their trucks out of the area for safety, the beginning half of the week’s outbound tender rejections will be on the rise in the state, mostly in the northern part of the state as the path of the storm is currently expected to go through Tampa, Gainesville and Jacksonville. After the storm passes and the ports reopen, the OTRI for Florida will fall and rates will return to normal.
Who’s with whom? It was about to be who’s not with whom, but Mexican truck drivers’ strike was postponed. The Mexican Alliance of Carrier Organizations had scheduled demonstrations across Mexico for Tuesday and Wednesday in the hope of highlighting issues facing drivers. Those issues include cargo theft, violence, higher costs, excessive toll fees, and the list goes on and on.
The strike has been postponed for three months after some work by the federal government. Had the strike happened, over 300,000 drivers across the country might have taken part in blockading main highways, disrupting intra-Mexico freight and cross-border freight as well.
As more shippers and manufacturers set up shop in Mexico, it’s crucial that these issues be resolved or at the very least that drivers have more support in handling dangers on the road.
Thoughts on this situation? Let me know. I’d love to share them with everyone.
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